The acquisition has provoked comment about defensive buying of patents, but Google surely has more ambition than that
For several years now, Google has been following a vow made by former CEO Eric Schmidt: mobile first. New CEO Larry Page is taking that dictum to a new level by announcing a deal to buy Motorola Mobility for $12.5bn.
The implications of this deal depend entirely on how Google plans to use Motorola. If, as some claim, the deal is more about obtaining Motorola's mobile patent portfolio than anything else, we can expect escalating patent warfare between technology giants and limited innovation beyond that. If, however, Google intends to operate the business it is acquiring, we may see some broad and sweeping changes in the technology industry.
If the deal is chiefly about obtaining Motorola's mobile patent portfolio, then Google would likely spin off the hardware end of the company and keep the software and patents. The patents would be vital weapons in its competition with Apple and Microsoft, as the two companies are using patent claims to try to slow the remarkable growth of Google's Android operating system, which has become the most widely used smartphone platform.
But assuming Google intends to operate the business it is purchasing ? and also assuming, as seems probable, regulatory approval of the deal ? the landscape for Google, and the technology industry more broadly, will change. Some of the implications are clear already.
Perhaps Google wants to be more like Apple, owning an entire ecosystem around Android. For all its success, Android has suffered from "feature balkanisation", as phone manufacturers and carriers have turned the open source system to their own aims.
Motorola knows how to make good hardware (though it's been outdone in that regard by Samsung and HTC in the Android market), and one can imagine some excellent devices ? once Google controls the outcome, as it did with its initial Nexus One phone (made by HTC) and Nexus S (Samsung).
Such devices should include tablets, which have been a notably dry area so far for Google and its Android 3 "Honeycomb" operating system. To date, Android tablets, including Motorola's Xoom, have made very few inroads in an arena heavily dominated by Apple. That may change with an Amazon tablet this fall, but Google needs to create its own to showcase what is possible.
In the near term, it is difficult to imagine any competitor fully matching Apple's ability to marry hardware and software with elegance and ease of use. Where Google could beat Apple, however, is by being less controlling of users than Apple has become: one reason many people (including me) have chosen Android is a preference to make more of our own decisions about how we want our devices to work.
To the extent that Google uses Motorola to develop and launch superb devices, it will be competing directly with its partners. The company claims that the deal will not affect its relations with other Android handset makers, but that strikes me as fantasy. A cascade of happy talk in amusingly similar, supportive statements from Samsung, HTC, etc on Monday can't disguise the reality that they should be weighing their options with renewed urgency. I don't see why they should trust Google, at this point.
So, who should be happy about this deal? Microsoft, among others. The Google-Motorola deal gives the Windows mobile platform a renewed lease on life. Microsoft could now position itself as the only major operating system that is platform-agnostic. That neutrality is somewhat suspect given Microsoft's recent alliance with Nokia, which includes a major investment and all kinds of special treatment, but it will be in Microsoft's interest to be as neutral as possible in dealings with its mobile partners.
Another, less obvious dimension of this deal is that it may help Google make enormous strides in the television marketplace. Google has been trying, with limited success, to push Android into living rooms via Google TV. Given that Motorola makes set-top boxes, Google TV could become part of this market. But the other cable and satellite companies will have a lot to say about this ? and they already consider Google a scary competitor, not a partner.
The most widely discussed element of the deal ? the patents ? highlights one of the technology industry's worst problems. As Chicago Public Radio's This American Life recently reported, America's patent system is highly dysfunctional. The United States Patent and Trademark Office (USPTO) routinely issues patents for "obvious non-inventions", many of which have already been invented. This enables patent "trolls" to extort settlements from companies allegedly violating those patents; this is, in effect, a tax on technology and a severe impediment to actual innovation. Meanwhile, several federal district courts ? notably one in Texas ? have become havens for the the patent trolls, further tilting the scales in favour of plaintiffs. And Congress, as usual, has refused to do its job. Among other acts of malfeasance, Congress has refused to give the USPTO the funding it needs to do the job properly, in part by appropriating the fees the agency collects from applicants in order to fund other programmes. A patent "reform" bill now under consideration and all too likely to become law would, by any reasonable analysis, make matters even worse.
To the extent that the Google-Motorola deal is defensive, a buying of weaponry in the ever-escalating patent warfare, it can hardly be called productive. But I hope it's about much more than that, namely Google's intention to push harder in the mobile arena to open it up to more competition.
Source: http://www.guardian.co.uk/commentisfree/cifamerica/2011/aug/16/google-motorola-mobility-acquisition
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